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[Federal Register Volume 89, Number 248 (Friday, December 27, 2024)]
[Rules and Regulations]
[Pages 105429-105431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-30652]

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CONSUMER FINANCIAL PROTECTION BUREAU

12 CFR Part 1003

Home Mortgage Disclosure (Regulation C) Adjustment to Asset-Size 
Exemption Threshold

AGENCY: Consumer Financial Protection Bureau.

ACTION: Final rule; official interpretation.

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SUMMARY: The Consumer Financial Protection Bureau (CFPB) is amending 
official commentary interpreting requirements of the CFPB's Regulation 
C to reflect the asset-size exemption threshold for banks, savings 
associations, and credit unions based on

[[Page 105430]]

the annual percentage change in the average of the Consumer Price Index 
for Urban Wage Earners and Clerical Workers (CPI-W). Based on the 2.9 
percent average increase in the CPI-W for the 12-month period ending 
November 2024, the exemption threshold is adjusted to $58 million from 
$56 million. Institutions with assets of $58 million or less as of 
December 31, 2024, are exempt from collecting data in 2025.

DATES: This rule is effective on January 1, 2025.

FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory 
Implementation & Guidance Program Analyst, Office of Regulations, at 
(202) 435-7700 or at: https://reginquiries.consumerfinance.gov. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION: The CFPB is amending Regulation C, which 
implements the Home Mortgage Disclosure Act of 1975 (HMDA) asset 
thresholds, to establish the asset-sized exemption threshold for 
depository financial institutions for 2025. The asset threshold will be 
$58 million for 2025.

I. Background

    HMDA requires most mortgage lenders located in metropolitan areas 
to collect data about their housing-related lending activity.\1\ 
Annually, lenders must report their data to the appropriate Federal 
agencies and make the data available to the public. The CFPB's 
Regulation C implements HMDA.\2\
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    \1\ 12 U.S.C. 2801-2810.
    \2\ 12 CFR part 1003.
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    Prior to 1997, HMDA exempted certain depository institutions as 
defined in HMDA (i.e., banks, savings associations, and credit unions) 
with assets totaling $10 million or less as of the preceding year-end. 
In 1996, HMDA was amended to expand the asset-size exemption for these 
depository institutions.\3\ The amendment increased the dollar amount 
of the asset-size exemption threshold by requiring a one-time 
adjustment of the $10 million figure based on the percentage by which 
the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided for 
annual adjustments thereafter based on the annual percentage increase 
in the CPI-W, rounded to the nearest multiple of $1 million.
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    \3\ 12 U.S.C. 2808(b).
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    The definition of ``financial institution'' in Sec.  1003.2(g) 
provides that the CFPB will adjust the asset threshold based on the 
year-to-year change in the average of the CPI-W, not seasonally 
adjusted, for each 12-month period ending in November, rounded to the 
nearest $1 million. For 2024, the threshold was $56 million. During the 
12-month period ending in November 2024, the average of the CPI-W 
increased by 2.9 percent. As a result, the exemption threshold is 
increased to $58 million for 2025. Thus, banks, savings associations, 
and credit unions with assets of $58 million or less as of December 31, 
2024, are exempt from collecting data in 2025. An institution's 
exemption from collecting data in 2025 does not affect its 
responsibility to report data it was required to collect in 2024.

II. Procedural Requirements

A. Administrative Procedure Act

    Under the Administrative Procedure Act (APA), notice and 
opportunity for public comment are not required if the CFPB finds that 
notice and opportunity for public comment are impracticable, 
unnecessary, or contrary to the public interest.\4\ Pursuant to this 
final rule, comment 2(g)-2 in Regulation C, supplement I, is amended to 
update the exemption threshold. The amendment in this final rule is 
technical and non-discretionary, and it merely applies the formula 
established by Regulation C for determining any adjustments to the 
exemption threshold. For these reasons, the CFPB has determined that 
publishing a notice of proposed rulemaking and providing opportunity 
for public comment are unnecessary. Therefore, the amendment is adopted 
in final form.
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    \4\ 5 U.S.C. 553(b)(B).
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    Section 553(d) of the APA generally requires publication of a final 
rule not less than 30 days before its effective date, except in the 
case of (1) a substantive rule which grants or recognizes an exemption 
or relieves a restriction; (2) interpretive rules and statements of 
policy; or (3) as otherwise provided by the agency for good cause found 
and published with the rule.\5\ At a minimum, the CFPB has determined 
that the amendment falls under the third exception to section 553(d). 
The CFPB finds that there is good cause to make the amendment effective 
on January 1, 2025. The amendment in this final rule is technical and 
non-discretionary, and it applies the method previously established in 
the agency's regulations for determining adjustments to the threshold.
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    \5\ 5 U.S.C. 553(d).
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B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\6\ As 
noted previously, the CFPB has determined that it is unnecessary to 
publish a general notice of proposed rulemaking for this final rule. 
Accordingly, the RFA's requirement relating to an initial and final 
regulatory flexibility analysis does not apply.
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    \6\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\7\ the CFPB 
reviewed this final rule. The CFPB has determined that this rule does 
not create any new information collections or substantially revise any 
existing collections.
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    \7\ 44 U.S.C. 3506; 5 CFR part 1320.
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D. Congressional Review Act

    Pursuant to the Congressional Review Act, the CFPB will submit a 
report containing this rule and other required information to the 
United States Senate, the United States House of Representatives, and 
the Comptroller General of the United States prior to the rule taking 
effect.\8\ The Office of Information and Regulatory Affairs (OIRA) has 
designated this rule as not a ``major rule'' as defined by 5 U.S.C. 
804(2).
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    \8\ 5 U.S.C. 801 et seq.
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List of Subjects in 12 CFR Part 1003

    Banks, banking, Credit unions, Mortgages, National banks, Reporting 
and recordkeeping requirements, Savings associations.

Authority and Issuance

    For the reasons set forth above, the CFPB amends Regulation C, 12 
CFR part 1003, as set forth below:

PART 1003--HOME MORTGAGE DISCLOSURE (REGULATION C)

0
1. The authority citation for part 1003 continues to read as follows:

    Authority:  12 U.S.C. 2803, 2804, 2805, 5512, 5581.

0
2. Supplement I to part 1003 is amended by revising 2(g) Financial 
Institution under the heading Section 1003.2--Definitions to read as 
follows:

Supplement I to Part 1003--Official Interpretations

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Section 1003.2--Definitions

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[[Page 105431]]

2(g) Financial Institution

    1. Preceding calendar year and preceding December 31. The 
definition of financial institution refers both to the preceding 
calendar year and the preceding December 31. These terms refer to the 
calendar year and the December 31 preceding the current calendar year. 
For example, in 2019, the preceding calendar year is 2018 and the 
preceding December 31 is December 31, 2018. Accordingly, in 2019, 
Financial Institution A satisfies the asset-size threshold described in 
Sec.  1003.2(g)(1)(i) if its assets exceeded the threshold specified in 
comment 2(g)-2 on December 31, 2018. Likewise, in 2020, Financial 
Institution A does not meet the loan-volume test described in Sec.  
1003.2(g)(1)(v)(A) if it originated fewer than 25 closed-end mortgage 
loans during either 2018 or 2019.
    2. Adjustment of exemption threshold for banks, savings 
associations, and credit unions. For data collection in 2025, the 
asset-size exemption threshold is $58 million. Banks, savings 
associations, and credit unions with assets at or below $58 million as 
of December 31, 2024, are exempt from collecting data for 2025.
    3. Merger or acquisition--coverage of surviving or newly formed 
institution. After a merger or acquisition, the surviving or newly 
formed institution is a financial institution under Sec.  1003.2(g) if 
it, considering the combined assets, location, and lending activity of 
the surviving or newly formed institution and the merged or acquired 
institutions or acquired branches, satisfies the criteria included in 
Sec.  1003.2(g). For example, A and B merge. The surviving or newly 
formed institution meets the loan threshold described in Sec.  
1003.2(g)(1)(v)(B) if the surviving or newly formed institution, A, and 
B originated a combined total of at least 200 open-end lines of credit 
in each of the two preceding calendar years. Likewise, the surviving or 
newly formed institution meets the asset-size threshold in Sec.  
1003.2(g)(1)(i) if its assets and the combined assets of A and B on 
December 31 of the preceding calendar year exceeded the threshold 
described in Sec.  1003.2(g)(1)(i). Comment 2(g)-4 discusses a 
financial institution's responsibilities during the calendar year of a 
merger.
    4. Merger or acquisition--coverage for calendar year of merger or 
acquisition. The scenarios described below illustrate a financial 
institution's responsibilities for the calendar year of a merger or 
acquisition. For purposes of these illustrations, a ``covered 
institution'' means a financial institution, as defined in Sec.  
1003.2(g), that is not exempt from reporting under Sec.  1003.3(a), and 
``an institution that is not covered'' means either an institution that 
is not a financial institution, as defined in Sec.  1003.2(g), or an 
institution that is exempt from reporting under Sec.  1003.3(a).
    i. Two institutions that are not covered merge. The surviving or 
newly formed institution meets all of the requirements necessary to be 
a covered institution. No data collection is required for the calendar 
year of the merger (even though the merger creates an institution that 
meets all of the requirements necessary to be a covered institution). 
When a branch office of an institution that is not covered is acquired 
by another institution that is not covered, and the acquisition results 
in a covered institution, no data collection is required for the 
calendar year of the acquisition.
    ii. A covered institution and an institution that is not covered 
merge. The covered institution is the surviving institution, or a new 
covered institution is formed. For the calendar year of the merger, 
data collection is required for covered loans and applications handled 
in the offices of the merged institution that was previously covered 
and is optional for covered loans and applications handled in offices 
of the merged institution that was previously not covered. When a 
covered institution acquires a branch office of an institution that is 
not covered, data collection is optional for covered loans and 
applications handled by the acquired branch office for the calendar 
year of the acquisition.
    iii. A covered institution and an institution that is not covered 
merge. The institution that is not covered is the surviving 
institution, or a new institution that is not covered is formed. For 
the calendar year of the merger, data collection is required for 
covered loans and applications handled in offices of the previously 
covered institution that took place prior to the merger. After the 
merger date, data collection is optional for covered loans and 
applications handled in the offices of the institution that was 
previously covered. When an institution remains not covered after 
acquiring a branch office of a covered institution, data collection is 
required for transactions of the acquired branch office that take place 
prior to the acquisition. Data collection by the acquired branch office 
is optional for transactions taking place in the remainder of the 
calendar year after the acquisition.
    iv. Two covered institutions merge. The surviving or newly formed 
institution is a covered institution. Data collection is required for 
the entire calendar year of the merger. The surviving or newly formed 
institution files either a consolidated submission or separate 
submissions for that calendar year. When a covered institution acquires 
a branch office of a covered institution, data collection is required 
for the entire calendar year of the merger. Data for the acquired 
branch office may be submitted by either institution.
    5. Originations. Whether an institution is a financial institution 
depends in part on whether the institution originated at least 25 
closed-end mortgage loans in each of the two preceding calendar years 
or at least 200 open-end lines of credit in each of the two preceding 
calendar years. Comments 4(a)-2 through -4 discuss whether activities 
with respect to a particular closed-end mortgage loan or open-end line 
of credit constitute an origination for purposes of Sec.  1003.2(g).
    6. Branches of foreign banks--treated as banks. A Federal branch or 
a State-licensed or insured branch of a foreign bank that meets the 
definition of a ``bank'' under section 3(a)(1) of the Federal Deposit 
Insurance Act (12 U.S.C. 1813(a)) is a bank for the purposes of Sec.  
1003.2(g).
    7. Branches and offices of foreign banks and other entities--
treated as nondepository financial institutions. A Federal agency, 
State-licensed agency, State-licensed uninsured branch of a foreign 
bank, commercial lending company owned or controlled by a foreign bank, 
or entity operating under section 25 or 25A of the Federal Reserve Act, 
12 U.S.C. 601 and 611 (Edge Act and agreement corporations) may not 
meet the definition of ``bank'' under the Federal Deposit Insurance Act 
and may thereby fail to satisfy the definition of a depository 
financial institution under Sec.  1003.2(g)(1). An entity is 
nonetheless a financial institution if it meets the definition of 
nondepository financial institution under Sec.  1003.2(g)(2).
* * * * *

Brian Shearer,
Assistant Director, Office of Policy Planning and Strategy, Consumer 
Financial Protection Bureau.
[FR Doc. 2024-30652 Filed 12-26-24; 8:45 am]
BILLING CODE 4810-25-P
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